GOING GREEN AS A MARKETING TOOL

CHAPTER 01
1.0 INTRODUCTION
Competitive advantage of a business refers
to a firms ability to earn consistent profits
over rival firms in the industry by delivering
a service which cannot be matched easily.
The strategy of low cost involves providing
a product at relatively a cheap price by
reducing a firms cost.
Over the years marketing strategists have
come to terms with environmental issues
affecting the global community and some
have thought of responding to these
concerns as most of the environmental
issues have to do with consumption.
The term green marketing has begun to
assume importance as result of firms finding
ways and means of being receptive to
environmental concerns. Green marketing
basically refers to making sure that the
marketing activities of a business are geared
to be responsive to minimize environmental
hazards.
This shows an increasing recognition on the
part of firms towards cementing a positive
relationship with the customers who have
shown alacrity for the preservation of
environment (Crane, 2000).
Firms have recognized the value of green
marketing as a step towards catering to
customer needs while appreciating the
significance to the growth and expansion of

a business. It has become fashionable for

companies to be touted being green as a way
of identifying themselves with customers.
Green marketing in fact represents a
paradigm shift strategy in many business
firms since it has altered the manner in
which a business goes about in reaching out
to the customers. Firms deploy number of
green marketing strategies to outsmart rivals
in the industry so as to gain competitive
advantage. There are pitfalls and limitations
in green marketing but overall as a
marketing strategy it has brought about
unique elements as strategy evolves in
different contexts (Ottman,1998).
1.2 PROBLEM STATEMENT
The concept of green marketing has
undergone tremendous transformation as a
business strategy since its first appearance in
the 1980s.
Business firms have realized the importance
of green marketing as a means of gaining
competitive advantage over rivals in the
industry. Business strategy of a business is
devised in response to the changing needs in
the market and Green marketing has
received a tremendous boost with the revival
of environmental consciousness among
consumers.
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Green marketing in fact represents a

paradigm shift strategy in many business
firms since it has altered the manner in
which a business goes about in reaching out
to the customers.

The importance of competitive advantage

for a business firms and how green
marketing is being relied upon by business
firms to realize competitive advantage. The
term green marketing and its main
characteristics are described in order to
understand the import of it in the present
business world context.
The thesis paper dwells at length on green
market strategy implementation so as to
provide glimpse as to how various
businesses deploy marketing mix in green
marketing. The necessary prerequisites for a
successful green marketing strategy are
identified and the drawbacks encountered by
a business firm embarking on green
marketing strategy are analyzed while
evaluating some strategies in place. The
success of green marketing strategy, as the
thesis paper underlies, rests largely on the
contribution, interaction and cooperation
between different stakeholders of a business.
1.2 OBJECTIVES
The purpose of this report is

To study Green Marketing as a

Business strategy.

To know the benefits of

green
marketing
to
sustainable
development.

CHAPTER 02
2.0 LITERATURE REVIEW

To identify the threats of Green

Marketing.
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2.1 GREEN MARKETING

This has been defined by many experts, it

can be concluded that green marketing refers
to all marketing activities which are
responsive
towards
protecting
the
environment. There is much avoidable
confusion regarding the term green
marketing, as people loosely identify it with
various phenomena in the present era. Some
attribute it as being responsive towards
climate change and global warming, while
others believe being in conformity with
environmental standards as green marketing.
Another group of people perceive recycling
as inherent in green marketing while the
majority of consumers and marketers alike
simply identify green marketing as
something that involves of promoting
products emphasizing their contribution
towards environment (Baker, 1999).
Since marketing is seen as a process
whereby the marketing mix (Product price,
promotions & place) is used to respond to
the needs and wants of customers while
achieving business objectives many
marketers have seen green marketing as
simply another way of satisfying consumer
needs under the same marketing mix.
However a closer look at the concept of
green marketing shows a distinct variation
that has transformed the traditional
marketing thinking (Kotler, 1997).

The term green marketing itself has

undergone many changes with different
terminology
such
as
environmental
Marketing and ecological Marketing being
vaguely used. The word green marketing
began to come to the surface in the 1980s
since there was growing awareness of the
global
community
regarding
the
environmental hazards and impending
holocausts. It was in this context that
environmentalists began to exert pressure on
business
firms
to
minimize
the
environmental pollution in the production of
goods and services. The firms too have
responded in equal measure by emphasizing
and incorporating these environmental
concerns in their business activities (Grant,
2007).
Today the concept of green marketing
entails certain fundamental elements.
Marketing
products
which
are
environmentally safe; developing and
marketing
products
to
minimize
environmental hazards; produce, promote,
and package products in a manner befitting
so as to protect the environment are some
characteristics of Green marketing as the
term is understood in the present business
world context (Ottman, 1998).
Green marketing involves establishing a link
between the business and customer; and this
process entails a holistic approach since
business will naturally have to integrate all
its activities in line with environmental
concerns. As a strategy, green marketing
involves strategic options such as Green
products, Green packaging, Green prices
and Green communication (Ottman, 1998).
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Green products are recognized as

ecologically friendly products. Green
packaging which is the explicit phenomena
in most instances has to do with suitable
packaging that reduces environmental
damage. Green prices show the reflection of
environmental concerns in monetary terms
which are intrinsic and transferable to the
customer. Green communication fosters a
positive image and coveys a business firms
concern towards the environment and the
public (Ottman, 1998).
2.2 GREEN MARKETING STATERGIES

The word Green" has been extensively

used in marketing by companies in the form
of green marketing, green customers, green
products, green supply chain, green services,
green retailing and many more.
It plays important role in informing
consumer about pro- environmental aspects
of the products and services. Many
companies stress their social responsibility
by projecting their efforts towards becoming
more environments friendly and by
advertising their green claims via corporate
marketing. Such green advertisement
addresses the relationship between a product
and its biophysical environment.
The eco- friendly claims of the products
( may or may not be authentic) are appealing
provided the public or customer is educated
about the inevitability of ecological
considerations, in developing of poor
countries, this kind of education is yet to
take off.

between customers and a business

organization. When satisfying consumer
needs using green marketing strategy, the
functional as well as emotional benefits of a
product will have to be highlighted since
most environmental concerns involve
spiritual needs of people. A green marketing
strategy differs from a classical marketing
strategy since it has more do with being
proactive, Value based; long term oriented,
integrated approach and more importantly
the lives of human beings which are central
to all initiatives (De Bakker & Frank, 2009).
Green marketing strategy offers a great
opportunity to mitigate the environment
problems. Thus, as a marketing strategy
green marketing includes:
Marketing Audit (including internal
and external situation analysis)

Develop a marketing plan outlining

strategies with regard to 4 Ps.

Implement marketing strategies.

Plan results evaluation.

Adoption of Green marketing

Opportunities or competitive
advantage

Corporate social responsibilities

(CSR)

Government pressure

Competitive pressure

Cost or profit issues

2.3 GREEN MARKETING MIX

A green marketing strategy brings about a

qualitative change in the relationship
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worth the effort since changes in the product

would bring about a turnaround in sales. The
technique of reversed logistics whereby
customers return to the business used
packaging, wrapping and even the used
product itself would considerably help to
preserve the environment (Peattie, 1999).
Marketing mix refers to generally the
different ways made use of by a company to
bring a good or service to the market. In
green marketing, the marketing mix will
have
to
be
responsive
towards
environmental concerns. In the case of
service sector products marketing mix is
known as the extended marketing mix.
Marketing mix as popularly known as 4Ps
comprises of components such as product,
price, place and promotion. In the extended
marketing mix as in case of service products
people, physical evidence and process are
added to make up 7Ps. As per green
marketing philosophy each element in the
marketing mix must have a green outlook
from developing to introducing a product to
the market (Kotler, 1997).

Product: The ecological objectives in

planning products are to reduce resources
consumption and pollution and to increase
conservation of scarce resources.

A product could be termed as a green

product if the process of production is
ecofriendly and causes less damage to the
environment. A business has to minimize the
environmental pollution in its production
process. The raw materials contained in a
product should be extracted in manner so as
to preserve natural resources. Waste
management as has been discussed forms a
vital area in this connection. Business will
have to introduce ecofriendly design and the
packaging should minimize pollution and
hazards. Product improvements necessarily
involve considerable sunk costs but they are

Those that promote a green lifestyle

by highlighting a product or service.

Price: It is a critical and important factor of

green marketing mix. Most consumers will
only be prepared to pay additional value if
there is a perception of extra product value.
This value may be improved performance,
function, design, visual appeal, or taste.
Green Marketing should take all of these.
Promotion: There are three types of green
marketing:

Ads that address a relationship

between a product/ service and the
biophysical environment.

Ads that present a corporate image of

environmental responsibility.
Place: The choice of where and when to
make a product available will have
significant impact on the customers. Very
few customers will go out of their way to
buy green products.

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CHAPTER 03
3.0 ANALYSIS & DISCUSSION
3.1 BENEFITS OF GREEN MARKETING

A good marketing program adds renewables

that would not already be added or supports
renewables projects that might not otherwise
continue to operate. If these things are
already happening and being paid for by all,
the program doesnt meet the bottom-line
test: green marketing programs must make a
difference.

these cases, there is no real competition in

the green market. In markets that are
vibrantly competitive and in which
consumers have good information, this is
less of a problem since lower- cost providers
can compete to displace those providers
charging excessive prices.

A sign of a good green marketing program

has strong links to local environmental
groups and that achieves broad support
among regional and national groups with an
interest in promoting renewable power.
Public Service of Colorado, for example, has
developed a close working partnership with
the Land and Water Fund and other
environmental groups in the state.
A green marketer is seriously interested in
greening the electric system will have a
program that is linked to a larger vision and
a strategic plan for making renewables an
increasingly larger part of the generation
mix.
For green marketing programs to be
successful in the long run, they should both
improve the environment and be fair to
consumers. Prices should not be excessively
higher than the actual cost of the resources
in the portfolio. The is particularly true for
green pricing programs, which are
scrutinized by regulations, and in
imperfectly competitive markets, because in

3.2 NEGATIVE IMPACTS OF GREEN

MARKETING

Selling green power at a mark up that

would have been produced anyway with the
cost shared by all.
An example of this would be renewable
power that is already included or would be
included in a utilitys rate base without the
green program. These types of programs sell
nothing as if it is something, which is worse
than doing no green marketing at all,
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because these programs are fundamentally

unfair and breed consumer cynicism. If we
permit these types of programs to occur,
they will undermine the market for those
marketers who are actually making a
difference.
Programs that do not in some way directly
benefit the renewable generator.
An
example of this would be a utility that has an
existing power purchase contract with a
renewable generator, but does not flow any
benefit through to the generator.
Programs that make false claims and do not
adequately inform consumers about the
nature of their product, unless the marketer
can prove to the public that the consumer
dollars they are collecting do not in any way
support, and support only the resources
claimed as green, such claims should not
be made.
Collecting premiums in exchange for vague
promises to build renewables in the future.
Consumers should not be asked to pay for
someone elses investment when they get
nothing in return, and when no tangible
benefit to society results.
3.3 GREEN MARKETING: COMPANY

INITIATIVES

Some
scholars
claim
that
green
policies/products are profitable, green
policies can reduce costs; green firms can
shape future regulations and reap firstmover advantages (Porter and van der
Linde, 1995; for a critique, see Rugman and
Verbeke, 2000).

in three ways: value-addition processes

(firm level), management systems (firm
level) and/or products (product level).
There are numerous examples of firms who
have
strived
to
become
more
environmentally responsible serving to
better satisfy their consumer needs.
Moreover, their activities also help them to
improve their revenues and profits in various
ways.

New Surf Excel that produces lesser

froth but is as effective as before,
thus reducing water consumption.

Lifebuoy had an
advertising
campaign encouraging children to
keep their streets clean and not worry
about germs as Lifebuoy protects
them.

McDonald's restaurant's napkins,

bags are made of recycled paper.

Coca-Cola pumped syrup directly

from tank instead of plastic which
saved 68 million pound/year.

The refrigerator industry has shifted

from chlorofluorocarbon (CFC)
gases to more environmentally
friendly gases.

For better living in society and sustained

economy, many other firms are contributing
to conservation of environment directly and
indirectly.

There are numerous strategies for the firms

to be green. They can be green themselves
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3.4 CHALLENGES OF GREEN

MARKETING

According to the Joel makeover (a writer,

speaker and strategist on clean technology
and green marketing), green marketing faces
a lot of challenges because of lack of
standards and public consensus to what
constitutes "Green".
The author opined the lack of consensus
by
consumers,
marketers,
activists,
regulators, and influential peoplehas
slowed the growth of green products,
because companies are often reluctant to
promote their green attributes, and
consumers are often skeptical about claims.
At the same time, consumers are mistrustful
of company claims of green as they have
become increasingly sophisticated and
knowledgeable through information from
the web.
As per Report published in Times recently
"Air pollution damage to people, crops and
wildlife in The US totals tens of billions of
dollars each year". "More than 12 other
studies in the US, Brazil Europe, Mexico,
South Korea and Taiwan have established
links between air pollutants and low birth
weight premature birth still birth and infant
death".
One of the main problems is that firms using
green marketing must ensure that their
activities are not misleading to consumers or
industry, and do not breach any of the
regulations
or
laws
dealing
with
environmental marketing.

Another problem firms face is that those

who modify their products due to increased
consumer concern must contend with the
fact that consumers perceptions are
sometimes not correct like in McDonalds
case where it has replaced its clam shells
with plastic coated paper. When firms
attempt to become socially responsible, they
may face the risk that the environmentally
responsible action of today will be found to
be harmful in the future.
This may explain why some firms, like
Coca- Cola and Walt Disney World, are
becoming socially responsible without
publicizing the point. They may be
protecting themselves from potential future
negative backlash; if it is determined they
made the wrong decision in the past. Thus
the problems with going green are:

Green products require renewable

and recyclable material, which is costly.

Require a technology, which requires

huge investment in R & D.

Water treatment technology, which is

too costly.

Majority of the people are not aware

of green products and their uses.

Majority of the consumers are not

willing to pay a premium for green products.
Despite these challenges, green marketing
has continued to gain adherents, particularly
in the light of growing global concern about
climate change. This concern has led more
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companies to advertise their commitment to

reduce their climate impacts and the effect
which is having on their products and
services. To win the trust, firms could have
compelling rationale to green their products,
policies, processes etc.

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CHAPTER 04
4.0 ANALYSIS & DISCUSSION

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CHAPTER 05
5.0 BIBLIOGRAPHY

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Turning Over a New Leaf ,
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Crane, A. (2000). Facing the

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11

Davies, R. (2007). Why John Grant

has helped make sense of the green
debate.
GREEN
Marketing
Manifesto, 47.
Dr. C.B. Mamoria and Dr. N.I.
Mulla, 2005, Modern Marketing,
Kitab Mahal.
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Enviropreneurial
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3.1 IMPORTANCE OF GREEN MARKETING

STRATERGIES TO SRI LANKA

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